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How advanced are your data analytics capabilities?

Most companies do have the capability to extract insights on past performance and current operating conditions from their data. We call this “descriptive analytics” or “data analytics capabilities”. Using historical data they can generate statistics and reports but as past performance is not a reliable indicator of future results. Using descriptive analytics tools alone to create plans and make business decisions is not advisable. With robust data analytics capabilities, organizations can effectively navigate and leverage insights for informed decision-making and strategic planning

Descriptive Analysis

  • Like Business Intelligence, it looks backward to understand what happened.
  • It helps companies generate an understanding of customer behavior such as through Clickstream Analytics that quantify the behavior of the customer on the website.

To be able to transform data into optimized plans and decisions,  companies must invest in algorithm-based technology that supports not only descriptive analytics, but also predictive and prescriptive analytics.

Predictive Analysis

Predictive analytics delivers data-driven, actionable insights on likely future conditions

  • Uses statistical models and other methods to predict what might happen based on previous events.
  • These Analytics use statistics, data mining andmachine learning methods.
  • It helps companies make decisions. Common uses include generating credit scores, forecasting sales and predicting buying behavior in retail.

Prescriptive Analytics

Prescriptive analytics tools often use mathematical optimization to generate a “prescription” that tells a company which are the right decisions to make and actions to take to reach their business goals.

  • Gives recommendations on what should be done, including for questions that were not specifically asked.
  • It is used to help companies optimize decisions made for scheduling, planning, and operations.For example, sending marketing campaigns to customers who are most likely to buy and optimize media investments.

So which data analytics approach – descriptive, predictive, or prescriptive – is right for your company? Which will enable you to unlock the true business value of your data?

The answer is: All three.

When used in combination, these different methods of analysis are extremely complementary and valuable to business success and survival.However, less than 10% of companies are using prescriptive analytics in their business, and only 40% are using predictive according to recent Gartner big data reporting.


Simulating Business Processes for Descriptive, Predictive, and Prescriptive …

By Andrew Greasley